Purpose: The objective of this paper is to investigate the direction of the causal relationship between dividend policy (DP) and earnings management (EM). Design/methodology/approach: This research utilizes the panel data analysis to investigate the causal relationship between EM and DP. It provides empirical insights based on a sample of 280 French nonfinancial companies listed on the CAC All-Tradable index during the period of 2008–2015. The study initiates with a Granger causality examination on the unbalanced panel data and employs a dynamic panel approach with the generalized method of moments (GMM). It further estimates the empirical models simultaneously using the three-stage least squares (3SLS) method and the iterative triple least squares (iterative 3SLS) method. Findings: The estimation of our various empirical models confirms the presence of a bidirectional causal relations...